Rural areas may not see commercial flights for years

QUEENSLAND'S regional towns 'won't see an aircraft for years' if the buyer of Virgin Australia ditches rural routes to focus on the 'golden triangle' of aviation - Brisbane, Sydney and Melbourne - an industry expert has warned.

The move to a no-frills service would spell the end of TigerAir and could see routes including Brisbane to Proserpine, Emerald, Rockhampton, Bundaberg, Gladstone and Mackay on the chopping block.

"If it's a low-cost carrier model that comes out it may fly to Townsville, Cairns and the Gold Coast, as for anywhere else in Queensland they won't see an aircraft for many years," Mr Hansford warned.

"It will concentrate on Brisbane, Sydney, Melbourne, Adelaide and Perth."

Queensland Investment Corporation, doing its bidding on behalf of the State Government which is eager to sandbag Virgin's Queensland operations, is edging closer to providing advice on the way forward.

The corporation has access to Virgin Australia's internal data and says it is still having "meaningful discussions" with all four bidders for the airline.

"We will recommend a course of action that represents the best commercial value for our client in keeping with its broader economic objectives," a QIC spokesman said.

"Our advice about the state's potential investment will be informed by our due diligence process and engagement with bidders."

Mr Hansford said the State Government should stay away from Virgin and instead underwrite Brisbane charter flight company Alliance Airlines to service regional centres under an 'Air Queensland' agreement.

"It's called public service obligations and it's common around the world," he said.

"(Treasurer) Cameron Dick doesn't need to put $200 million into Virgin, a national operation, to secure Queensland's domestic aviation.

"Rather than spend $200m they should be dealing with a Queensland company and coming to an agreement where they provide a service to all these routes if they're not served by QantasLink."

It comes as Treasurer Josh Frydenberg emerges as one of the last people required to sign off on the Virgin sale, with all bidders expected to need Foreign Investment Review Board approval.

The approval, required under laws introduced in March to stop foreign bidders snapping up Australian assets at rock bottom prices during the COVID crisis, will put pressure on the aggressive sale timeline enforced by administrator Vaughan Strawbridge.